NY pension fund return for 1st quarter: 0.29%

It wasn’t the greatest quarter the state’s retirement fund. It produced a rate of return of 0.29 percent, Comptroller Thomas DiNapoli said today.

But it could have been worse. DiNapoli’s spokesman Eric Sumberg noted that last year’s first quarter result was -0.92 percent. Yet the fund ended the 2012-13 fiscal year up 10.4 percent.

The goal is an annual rate of return of 7.5 percent. That’s the rate set by the fund’s actuary. And depending on whether pension fund meets its target directly impacts what local governments and the state pay for retirement benefits.

Municipalities and the state are still digging out from the 2008 and 2009 recession, when the stock market plummeted—along with the pension fund. That’s led to soaring pension costs in recent years—putting heavy pressure on local budgets.

The fund ended the quarter valued at $158.7 billion. It provides benefits to 1 million retirees and current workers.

“The Fund’s positive performance in the markets was offset by a weak return in our fixed income holdings in the first quarter of the fiscal year,” DiNapoli said in a statement. “Our investment strategy is geared toward the long-term and we will continue to keep that perspective as we focus on providing strong returns year after year.”

The pension fund was outperformed by the S&P at a 2.9 percent return; the Dow Jones Industrial Average at 2.27 percent and the NASDAQ at 4.15 percent. But DiNapoli’s office warns that the indices aren’t the best benchmark because the pension fund is also invested in bonds, private equity and hedge funds, which had a negative quarter.